Trey G. Freeman, Commodity Futures Broker/Livestock Agent, Ever.Ag
Open interest in live cattle futures increased by about 15,000 contracts last week, with August futures hitting a nine-month high. The contract closed the week at $186.425 per 100 lbs, up $1. The August contract remains at a discount to cash prices, with Five Area Fedsteer prices hovering around $195 per 100 lbs.
Goldman’s roll began this week and will continue through Friday. The roll will limit the upside potential of the August contract and provide support to the October and December futures. Once the roll is complete, the August contract will have a seasonal tendency to rise through the remaining months.
Cash is expected to trend weaker toward the end of the month as the industry expects beef prices to soften and loin prices to fall. Boxed beef prices, however, rose slightly again last week, with choice averaging $329.96 per 100 pounds, up $6.25 from the previous week. The increase, which began in mid-June, bucks the seasonal trend.
In the coming weeks, premium beef prices will likely fall to the $300 per 100 lb. level. However, a tight supply of lean ground beef in the 90s will support the beef market as cattle slaughter has fallen sharply this year. Through the first 25 weeks of this year, cattle slaughter is down nearly 15% compared to the same period last year.
August Feed Cattle futures settled this week at $261.475 per hundredweight, $2.175 higher. Late summer and fall contracts continue to post higher lows on the monthly chart for the fourth consecutive month. Slumping corn futures provided support for Feed Cattle, while February and April 2025 Live Cattle futures remained flat, impeding any upward movement. August Feed Cattle are facing stiff resistance at $265 per hundredweight. A close above this level would open the door to a yearly high of $272 per hundredweight, recorded in February.
Commodity futures and options trading involves a substantial risk of loss. Investors should carefully consider the inherent risks in light of their own financial situation. Information contained herein has been obtained from sources believed to be reliable, but has not been independently verified. The information contained herein is strictly the opinion of the author, and not necessarily the opinion of Ever.Ag, and is intended for solicitation purposes. Past performance is not indicative of future results.
